KEY POINTS:
$10K is one of the biggest ceilings in the used car market
A huge amount of cars get compressed into the $10K space
Do your best to shop above $10K.
Private sellers > dealers
Consider short term ownership periods
The $10K budget is, arguably, the most popular budget for a car and there is much to write and learn about this price point. While this can be an hour long TED-talk, I will compress this down to just a few points.
BIGGEST CEILING IN THE MARKET
In short, $10k cars are valuable enough to not be at the bottom of the market, but not enough to be above $10k. There’s a very small window that cars in this area operate in.
For example, a 2013 Honda Civic with 100k mi will have a tougher time transacting at $11,000, but it will become an easier sell at $9,000.
Let’s use this Honda Civic example to further the point.
THE COMPRESSION ZONE
If a new 2026 Civic is $26K and there are still 30 years of Civic’s represented in the market, there’s only so many places where the cars can all slot in. Where do they all go? And if a 2013 Civic holds the $9k space and a 2003 Civic holds the $4k space, the 2014-2017’s have a much slower time down to $10k.
The gravity of the car market naturally brings car prices down as far as they can go, but car values end up being held up by older variants to create a “compression zone.”
SHOP UPSTREAM
Ultimately, if you have a $10K budget, see if you can do $12k. Entering the next $5K price block will make a world of a difference.
PRIVATE SELLERS VS DEALERS
Do you notice that franchise dealers (like your local Honda or Toyota dealer) don’t carry much inventory (if at all) below $10K? That’s because of a few reasons, among them:
Cheaper cars are harder to get financing for
They’re not worth the hassle, as new-car dealers need to comply with state inspection rules
Easier to sell at auctions and make quick profits
So then who are the dealers that sell these cheaper cars? They’re private used car dealers.
Now, I won’t go as far as to say that every private used car dealer is shady, but from my experience, 80% of them are, especially if they specialize in sub-$10K cars.
In addition, when shopping in the sub-$10K space, it’s helpful to know vehicle and ownership history. There’s very little information available if the car is on a dealer lot.
For this reason, when it comes to the sub-$10K space, I like to shop in the private market. I get to shop the owner and find more clues to know if a car has been taken care of or not.
SHORT TERM OWNERSHIP PERIODS
This is food for thought. Sub-$10K cars are older and have more miles than pre-COVID times. Because of this, maintenance costs can get rather high. Consider shorter term ownership periods.
There’s no rule that says that if you buy a car, you must keep it for 5 years. Consider driving a car for 2-3 years and exiting. You may be able to escape a world of hurt by selling the car before it needs thousands in repair costs.
The sub-$10K space is hard to shop in, but because cars depreciate less now than before, you can still get away paying less, overall, than before. Shop smart, target the right cars, and stay tuned for more tips.
